CHICAGO — Iowa Treasurer Michael Fitzgerald called Gov. Terry Branstad's alterative to the federal government's Medicaid expansion a bad deal for the state that could eventually strain its coffers.
"I have sat down and read the Senate and the governor's health care plans. Gov. Branstad's plan is a bad financial deal for Iowa, while expanding Medicaid is the financially smart move for the state of Iowa," Fitzgerald said.
The governor's office did not respond to a request for a comment.
Fitzgerald, a Democrat, favors a proposal from Senate Democrats that expands Medicaid under the federal health care law. Branstad, like many of his fellow Republican governors across the nation, has offered up an alternative. Branstad has promoted his alternative on the belief that expanding Medicaid is not sustainable over the long-term.
Under the federal health care law, the government covers the full cost of expansion for the first three years and then 10% is shifted to states in increments.
Branstad's "Healthy Iowa" proposal would expand an existing program known as IowaCare which provides health care to qualified low-income adults and is paid for by a mix of state and federal support. The state needs federal waivers to put the plan in place.
Democrats and Republicans have bickered over the cost of each plan to the state.
Fitzgerald citing analysis done by Senate Democrats and the Legislative Services Agency said the Senate Democratic Medicaid proposal would cost the state an additional $4.76 million in fiscal 2015. Branstad's proposal would cost the state $162 million in fiscal 2015. Branstad has provided different numbers saying his plan costs $23 million in fiscal 2015 compared to $83 million for the Democratic proposal.
Fitzgerald put the additional cost of Branstad's plan at $1 billion over six years. He believes it could burden the top-rated state and also local counties — due to the plan's partial reliance on funding from property taxes — during a future economic recession when budgets are strained.
"There is a potential there for affecting the state's credit rating and even a potential for affecting county governments," he said.